Tipping points for involuntary turnover

By Clinton O. Longenecker and Laurence S. Fink

Executive SummaryAn uncertain economy and high unemployment might make organizations complacent about their current managerial staff. But enterprises everywhere are looking for good managers. To keep them from poaching yours, take steps to ameliorate the top 10 tipping points that could drive your high-performing employees into the arms of competitors.

The economy is still limping along. Unemployment rates remain high and unhealthy. In this environment, it seems like the limited opportunities and a sense of insecurity would make people less likely to leave their current employer. Despite this, voluntary separation by employees is increasing in certain industries such as pharmaceuticals, high-tech, finance, high-end manufacturing and chemicals.

What would drive valuable employees to leave their current employers? It is critical to note that a substantial body of research has found that voluntary turnover frequently involves high-performing individuals who can find new employment opportunities quickly in almost any type of employment climate. This suggests that even in a high-unemployment environment, organizations cannot become complacent if they want to keep employees and maintain their competitive advantage through people. This is especially true with top talent and critical skill sets.

Some experts believe that individual employees reach a tipping point when making the decision to leave their current employer. This tipping point can occur through a series of relatively small workplace events that wear away the foundations of commitment employees have with their employer. These smaller issues can have a cumulative effect that ultimately causes an employee to say “enough” and go seek a new employment opportunity. This is especially true if repeated triggers occur over a short time horizon. In other cases, a single major experience is so negative that it might cause the employee to say it is time to go. In either case, organizations can bleed irreplaceable talent that hurts their ability to compete.

Most previous research in this area has focused on why lower-level employees voluntarily leave their employer. This study focused on understanding why management personnel voluntarily leave. Given both the financial and intangible costs of replacing a manager in the 21st century, it is important to take note of the information participants in this applied study shared with us about why managers get up and go. In addition, we offer specific recommendations to help businesses avoid losing good people.

The investigation

We conducted a two-part study surrounding the question of how business leaders know when it is time to leave their current employer. In part one, we asked a sample of 244 middle and front-line business leaders from more than 40 different U.S. service and manufacturing organizations to answer the following question: “Based on your experience, how does a business leader know when it is time to leave the current employer?” After completing their individual responses, participants were assigned to five- to six-person focus groups to develop a consensus around the top factors that caused managers to leave their current employer.

Participants averaged 38 years of age, and the sample was 58 percent male and 42 percent female. On average, individuals identified 6.4 primary factors, and each of the 44 focus groups identified 7.3 factors. Responses to the focus group rankings were then content analyzed, and frequency counts for each item were tabulated. Figure 1 contains a ranked order list, with frequencies attached, of the top 10 findings identified by participants in the focus groups. This represents a list of the primary triggers that tell a manager that it is time to go.

Trigger mechanisms

The following are the top 10 factors that emerged from this study. They provide recommendations for employers who may be experiencing unhealthy levels of voluntary turnover in their management ranks.

1. Current boss lacks competency/character. To no one’s surprise, participants made it clear that working for a “bad” boss is the No. 1 reason why a manager will leave an employer. Managers openly discussed two particular types of problematic bosses: incompetent ones and those without character.

When subordinate managers have to follow the lead of a superior who they view as “incompetent,” “clueless,” “unqualified,” “inept” and/or “ineffective,” this eats away at their willingness to stay in their current employment situation. Incompetent bosses destroy performance, teamwork, innovation and morale and create chaos when managers at all levels already face severe competitive pressure.

Participants also recognized that a “lack of character,” “integrity” and/or “principle” on the part of their superior had a demoralizing effect on subordinate managers. These participants indicated that it was nearly impossible to stay in a position where they could not trust their boss. An unprincipled leadership style breeds fear, uncertainty and doubt in subordinate managers, all of which hinder performance. Organizations that face rapid change and competitive pressure must have subordinate managers who trust their superiors. When a manager’s boss is found lacking in both character and competency, participant managers said it had a multiplicative effect on their desire to flee their current work situation.

Bad bosses not only damage current performance, they erode an organization’s long-term capabilities by driving good managers away.

2. Caustic/dysfunctional/overly political work culture. The second trigger made it crystal clear that managers find the grass looking greener elsewhere when they have to operate in organizational cultures that are described as “hostile,” “back-biting,” “war zones,” “cannibalistic,” “acidic,” “antagonistic,” “partisan” or “broken.” Such dysfunctional cultures degrade a manager’s ability to perform well and create value. Managers cited extreme frustration with trying to do their jobs and deliver results in these counter-productive types of organizational environments.

Workplaces can morph into these dysfunctional environments for any number of reasons, such as ineffective top management, poor labor relations, broken processes, destructive politics, jurisdictional ambiguities and not practicing the fundamentals of effective management and leadership. When managers find themselves immersed in this type of “sink or sink” situation, they can do only so much to try to redirect the culture. Managers need cooperation, goodwill, open communication and fact-based decision making. In the words of one participant, “A little fun, functionality and fellowship in the workplace goes a long way to make me want to come to work and get things done.”

3. Unethical/illegal business practices. As a single triggering event, witnessing unethical and/or potentially illegal business practices can be a strong reason for managers to leave their employers quickly. Our focus group members articulated that when their employer engages in “questionable,” “dubious” or “debatable” business practices, red flags immediately go up. When managers realize that their employer is engaged in illegal activities, are pressured to engage in these activities, are encouraged to “look the other way” or “not rock the boat,” it is a sign for the manager to cut and run before they become ensnared in such shenanigans.

To remain with such an organization is a prescription for personal and career-ending professional disaster. Participants were keenly aware of these costs, as they cited many news stories of fallen business leaders that provided cautionary tales of what can happen if a manager does not get away from crooked organizations. While the participants did talk about whistle blowing, in the context of this study the real focus of the discussion was getting away from employers engaged in these practices.

4. Feeling disrespected, disempowered and disenfranchised. By nature, managers generally are ambitious, self-starting, hard-working people who get things done. Research tells us that managers have high needs for recognition, influence, control and achievement. One of the more interesting findings happened when our focus groups talked about the importance of leaders being properly engaged, empowered and respected by their superiors and, by extension, their employers. Business leaders who operate in organizations that do not satisfy these needs can lose their sense of commitment.

When managers have only limited power to make decisions and influence performance outcomes and are treated as “functionaries” rather than as “partners and contributors,” they realize that they may be working in a place that needs to become listed as “previous employment” on their resumé. A great deal of the discussion by participant managers about this trigger related to how superiors in their organizations tended to treat their subordinate leaders in ways that drove them away. Managers operating in organizations that discount the importance of human leadership capital can quickly cause managers to have a sense of “frustration” and “alienation.” Managers who are not allowed to engage fully in decision making waste their talent. This inhibits their capability to perform and provides a primary reason for exiting.

5. Limited advancement opportunities and lack of commitment to management growth/development. To no one’s surprise, managers in this study strongly indicated that a lack of promotional opportunities and a limited emphasis on growth and professional development by their organizations sent a clear message that it might be time for them to seek new employment. One of the hallmarks of the modern workplace is the lack of clearly defined career paths, a situation that can create uncertainty and insecurity for managers. Organizations aggravate this situation when they fail to make management development and career planning a systematic organizational activity.

Our previous research confirms that organizations frequently do not put in the appropriate levels of time, planning and energy into career development. Managers in the study indicated they want their organizations to demonstrate commitment to their future and take specific actions to develop their talents and skills as leaders. When organizations lack both promotional opportunities and place little or no emphasis on career development, managers realistically conclude that their career aspirations no longer can be met by their current employer.

6. Lack of workplace support and resources. Managers, who are asked to do more and more because of increasing competitive pressure, are quick to comment on the fact that they must have workplace support and a minimum threshold of resources to get their work done. Our managers had robust discussions around the fact that they easily find themselves working in an environment where they are asked to pursue aggressive goals and performance outcomes without the requisite “tools,” “staff,” “information,” “budget,” “authority,” “planning” and “access” to deliver the results they are responsible for achieving.

These managers get that the new norm is to do more with less, but they say there is a tipping point beyond which effort, planning, motivation and leadership talent cannot make up for the lack of resources. When these difficult conditions become the rule, rather than the exception, managers think they are on a mission impossible where they are set up to fail.

A lack of support also can come from poor working relationships with superiors, peers and other critical personnel within the organization. Either way, a lack of resources and support degrades managers’ ability to get things done and their commitment to stay with their employer. This greatly increases their stress levels beyond tolerable levels, and leads to their becoming ”disheartened,” “demoralized” and looking for an exit ramp.

7. Unreasonable expectations/extreme work-life imbalance. Overly aggressive goals, compressed time frames, excessively lean/anorexic environments, constant demands for travel, excessive meetings, information overload and 24/7 technology links to the job are just a few of the factors that lead managers to burn out and lose any manageable work-life balance. The managers in this study expected to deal with great responsibility, meet deadlines and work long hours. However, they indicated that there is a thin line between being extremely busy and being “continuously overloaded,” with “work becoming completely incompatible with their family situation.”

Managers indicated that when they were given hard and specific goals it actually improved their motivation and performance. However, when their work responsibilities and expectations were deemed “unreasonable” or “undoable,” their motivation crashed. For “too busy” managers, communications break down, decision making suffers, relationships at work and home become strained, planning suffers and problems are left unresolved. Such circumstances also can cause unhealthy lifestyles that include “high levels of stress,” “lack of exercise,” “minimum time for leisure or recharging,” “loss of sleep” and “poor diet.” This exacerbates the situation, lowering their productivity in a time where expectations are already high, leading to a vicious downward cycle.

8. Better employment opportunity and compensation issues. Managers usually are not motivated to look for better opportunities if they think they have a future with their current employer, have effective work relationships, are handling the job effectively, are growing and developing and believe that they are fairly compensated. It is generally believed that managers are quick to leave their current employers for better opportunities, but it is important to recognize that this particular factor is No. 8, not No. 1, on this list, according to study participants. Good people always will be in demand, and new opportunities will seek them out through social networks, headhunters or professional contacts. When these opportunities are presented, they can be a trigger for leaving their current employer. This situation is worsened when managers decide to begin their own personal job search due to dissatisfaction with current employment opportunities and financial remuneration.

9. Current employer struggling/sinking. Participants in this study made the case that it is critically important to monitor the fiscal and long-term viability of their employers. Our participant managers made it clear that it is important to “keep your eyes open,” “keep your ear to the rail,” “look for warning signs” and “Google” their own company from time to time. These managers look for signs of a current or future financial tsunami that might put them in the unemployment line.

They understand the well-worn business axiom that it is always easier to find a job when you have a job. As such, managers indicated it was important to be proactive in these scanning activities to avoid financial hardship and longer periods of unemployment. Managers also recognized that a protracted downturn would affect them personally and professionally. Tying in with the previous triggers, they knew this would lead to reduced resources, higher demands and increased workloads, while they likely would receive reduced financial rewards. So when sales are flat-lining and profitability is in the tank, managers often start looking at other opportunities.

10. Underutilizing talent and ongoing boredom. The last but still important “trigger” of voluntary managerial turnover focused on how managers will look for other employment opportunities when they feel they are wasting their time and talent in their current position. Regardless of compensation, quality of the work environment or working relationships, managers will be frustrated and dissatisfied if they believe they are not doing meaningful work. “Bored” and “disinterested” managers ready to join “the walking dead” are signaling that they might not be in the right position or company.

Talented managers become bored more quickly than less talented managers. Hence, the likelihood of turnover of your top performers, given this factor, is much greater in these circumstances. Managers indicated that smart organizations looked for ways to keep managers stimulated with work on interesting ad-hoc projects, special assignments, cross-training, and other developmental opportunities to stimulate learning and talent growth.

Addressing the tipping points

Managers are the critical linchpins to executing strategy and maintaining competitive advantage. Their performance critically affects the bottom line. Turnover and loss of talented managers frequently are cited as primary reasons for subpar performance and even organizational failure. The findings of this study provide great insights into how to mitigate manager’s desires and motivation for voluntarily seeking employment opportunities with your competitors.

At the same time, the recommendations that address the reasons why managers voluntarily exit the organization are the same factors that can be used to enhance overall managerial performance. To help you use this information to enhance your competitive advantage in the leadership arena, examine the following recommendations based on the results of this study and ask yourself a key question in this regard.

Deal with bad bosses now. Virtually every organization has ineffective or bad bosses. This is not the real problem. The real problem exists when organizations fail to address and deal with the performance of bad bosses, who are tops among the things that drive good managers to leave their current employer. When organizations identify and address ineffective performance among individuals in key leadership positions, they can be solving myriad short-term and long-term performance busters.

Key question: Is your organization effective in dealing with managers who lack both character and/or competency?

Realistically clarify your manager’s roles, goals and performance expectations. In these competitive times, it is imperative that every manager in your organization have roles, goals and performance expectations that add value and are grounded in reality. Activities that do not provide value should be eliminated, and organizations must take proactive steps to ensure that jobs can be performed by “mere mortals” without sacrificing their performance, quality and health. Key question: Are managers in your organization properly focused on the activities that truly add value and optimize the use of their time, resources and energy, and are their goals realistic?Provide ongoing support and empowerment to your managers. Organizations are well-served when they provide managers with the physical and psychological resources they need to achieve desired levels of performance. Managers must have the authority and tools they need to carry out their responsibilities and duties. Failing to provide reasonable support damages performance and opens the door to manager frustration, withdrawal and, eventually, organizational separation.

Key question: Do we know what support and resources our managers realistically need to be successful?

Create a high-performance workplace. The findings of this study make it clear that dysfunctional and overly political workplaces can be a real problem for managers at many levels. Rather than focusing only on morale and workplace satisfaction, organizations are served better by identifying and building on the factors that improve real performance. If the focus is on enhancing performance issues like teamwork, innovation, problem solving and process improvement, problems will surface and be addressed. Creating better places almost always involves addressing the problems that drive poor performance.

Key question: Do we work hard as an organization to create functional workplaces that encourage and equip members to deliver their best performance?

Focus on management development. Organizations are well-served when they place greater emphasis on helping their leaders develop and perfect the skills and talents necessary for success. Although promotional and advancement opportunities in any organization might be limited, managers appreciate and respect employers that place a premium on the activities that promote management development. Focusing on this area can improve management performance. At the same time, such development eliminates a primary trigger that might cause a valued manager to exit.

Key question: Does your organization have a systematic approach to helping managers develop the skill sets necessary to improve their performance and equip them for advancement?

Ethics, character and principle must matter. It is important to note that the issues of character, integrity, principles and business ethics were critical to the managers in this study when deciding whether to leave an employer. Organizations are well-served when they recognize and reward principled leadership and ethical decision making. To not do so is to open the door to many problems that can damage and destroy individual and organizational reputations.

Key question: Does our organization encourage and promote the highest standards of leadership character and ethical behavior?

You are going to lose some people. Finally, no matter how hard an organization works to retain managers, voluntary turnover is always part of doing business. The key is to control the factors that can be controlled so that your organization does not unnecessarily lose the people it needs to be successful. Not addressing these issues invites poor performance and additional voluntary turnover. The study points out that you always must monitor for the competitiveness of your compensation and other organizational rewards.

Key question: Has your organization explored the causes and consequences of voluntary management turnover to minimize any damaging effects?

In closing, giving thought to these seven recommendations will be time well-spent for you and the members of your organization in your quest for better control of your organizations’ current performance and future destiny.

Clinton O. Longenecker is a business consultant, author, speaker, executive coach and the Stranahan Professor of Leadership and Organizational Excellence at the University of Toledo. He has published more than 150 journal articles and is the co-author of the best-selling books Two Minute Drill: Lessons on Rapid Organizational Improvement from America’s Greatest Game and Getting Results: Five Absolutes for High Performance. Longenecker specializes in rapid performance improvement in both his research and consulting.

Laurence S. Fink is a professor in management in the College of Business Administration at the University of Toledo. His research, publishing and consulting is in improving the effectiveness of human resource management systems and management performance and improvement.